Curves is Franchisor of Year? Say What?
April 8, 2009 by Sean Kelly
Filed under Business
That wacky AAFD is at it again! The American Association of Franchisees & Dealers (AAFD) has named Curves International its 2009 Franchisor of the Year!
(In other news, Bernard Madoff has been named Investment Advisor of the Year and Kim Jong Il has won the Nobel Peace Prize…) 
You may remember the AAFD as the supposedly pro-franchisee organization that gave Cuppy’s Coffee the “fair franchising” award and public praise it needed to help scam many more out of $30K – $40K deposits before completely abandoning the lucky franchisees who managed to get open (and lose hundreds of thousands).
According to the breaking story on Unhappy Franchisee, (CURVES: AAFD Names Curves Franchisor of the Year), the AAFD awards will be presented at the Total Quality Franchising Awards Banquet on Thursday, April 30, 2009, during AAFD’s 17th Annual Conference in San Antonio, Texas.
Why is Curves the AAFD Total Quality Franchising Franchisor of the Year?
I could not find the release explaining why the AAFD chose Curves, out of all the franchisors in the country, as the Total Qualitiest Franchis-i-rific franchisor of them all, so I’ll have to guess.
Because Curves is being sued by so many franchisees?
Because Curves has one of the highest SBA loan failure rates in the nation? (See QUIZNOS, COLD STONE, SUBWAY & CURVES TOP FRANCHISE LOAN DEFAULTS)
Because Curves International forbids even failed franchisees from selling the equipment they paid for?
Because the mention of Curves has prompted more than 1000 comments, mostly unhappy? (Read: Is Curves for Women a Good Franchise Investment? )
Or because Curves charges their failed franchisees a $10,000 “failure fee,” then allegedly hounds them for tens of thousands of dollars even after they’re bankrupt?
Has the AAFD read the comments left here and on UnhappyFranchisee about Curves charging failed and failing franchisees? Here are a few.
CA ex-owner wrote:
We closed our club in August. Curves demanded $10,000. We refused and they lowered it several times (down to $6,000) and we still refused.
Next legal sent us a letter demanding over $42,000 for future franchise fees and future advertising.
Betty Priest wrote:
I closed my Curves Dec. 30, 2009. Curves reduced the closing fee to $3000 and then in Jan. they reduced it to $2000. I told them I did not have the money to pay them. I not working and I had surgery on Jan. 19. I now have received a legal paper from them that I have to pay them over $28000 in franchise fee and advertising fees.
Melissa wrote:
I am evidently getting ready to face my real nightmares, concerning my closing of my Curves. I am at the threat stage with them and have not agreed to any amount yet. Mostly because I have nothing left. I am closing in two weeks. I gave it all of my money and my best shot the past six years.
…I am hearing they will still sue me even if we agree to an amount. I wish I had some answers, even though I have no money left to give anyone. I really don’t know what to do next….
How can they hurt so many people financially and get away with it? All we wanted was to work hard and make a decent living, totally impossible with two clubs in our area!! We haven’t even broken even in three years.
Carrie wrote:
…I am now down to $2,500 to settle the closing of my Curves. I do not have the money to send them and if I did I do not want to give them one more penny. I am $85,000 in debt which I will be paying on until I’m very old (hopefully I live!)
Sheila wrote:
I am in the same boat as the rest of you! They are doing the same thing with us.. we closed this past Wednesday… we have been open 4 1/2 years and just can’t do it anymore.. all of our credit cards are maxed to the limits and we did our best..
…I’m so sick of their fees and you owe us this and that.. like everyone here has said Howard is supposed to be a Christian? Why doesn’t he understand that peoples lives are getting ruined by his fees? Haven’t we had enough punishment when we have sacrificed so much? The economy should be telling him something when the franchisees and members are dropping like flies! We just got the paper saying we owe them the 10K.. we are right along with the rest of you.. if I had 10K don’t you think I’d be in business right now?
…what really makes me mad is they get their money.. now popcorn sales, cereal sales, curves bars etc and we are all suffering.. I haven’t had a paycheck in 2 years.. I did my best.. I gave my all.. and now to find out you want 10K? Are these people for real? I will never ever in my life own nor participate in any franchise ever again.. thanks Howard for teaching us that the hard way…
These and other comments can be found on the post: CURVES: Robert Lay’s Story
A complete list of Curves-related posts are here: CURVES: Franchise Overview & Links
Perhaps Curves has made some progress in the past year, and the AAFD wants to reward them. Or perhaps Curves wrote them a big check to help offset the negative comments being left here and elsewhere. If you have any idea how they’re justifying this award, please share it below.
Some AAFD-related posts:
AAFD Award Caffeinates Growth of Cuppy’s Coffee Franchise
AAFD: Franchising Watchdog… or Lapdog? Part 1
AAFD: Franchising Watchog… or Lapdog? Part 2
Franchise Buyers: Don’t Get Fooled by Fair Franchising Awards
Answer This Franchise Due Diligence Quiz Question
Cuppy’s Coffee: Some Words from AAFD Raises More Questions
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
PHOTO: unhappyfranchisee.com
I was really surprised to see that the AAFD chose CURVES as franchisor of rhe year and I share your amazement, Sean, at the choice? What is going on here? Is the Madoff syndrome some kind of cover for “innocence lost” in the commercial sector of our country?
What CRITERIA does the AAFD use when selecting a franchisor to honor them? Do they throw names in a hat and does Robert Purvin just draw one from the hat? Is their any kind of financial reward or advantage for AAFD in chosing Curves as Franchisor of the year? Does the AAFD join Entrepreneur in inadvertently misrepresenting the viability of a franchisor to the public and to new buyers of the franchise?
Does the AAFD look at the concept and if it is in trouble and SATURATED, do they decide that they will try to save a franchisor within that troubled and SATURATED sector?
Is the AAFD trying to help Curves with all of the lawsuits that have been filed against them? Certainly, the judges will be impressed with a franchisor who is the AAFD “Franchisor of the Year” and who certainly wouldn’t be guilty of fraud or breach of contract if the author of Franchise Fraud says that Curves deserves to be “franchisor of the year.”
I’m sure all of those in the legal circle and in franchising know that Robert Purvin wrote the famous book “Franchise Fraud” that apparently gives the AAFD great credibility with franchisEES and franchisors alike!
But, why Curves? Can franchise organizations like the AAFD, because of the hybrid legal relationship of the franchisor and the franchisee, and captured regulatory poicy, really serve two masters?
I don’t think so! The “stacked deck” is merely repackaged and organizations compromise with the ugly status quo that permits franchisors to use prospective franchisees merely as expendable resources as long as the franchisor is compliant with the FTC Rule and gets a signature on the binding, non-negotiable, adhesive franchise contract.
My condolences to all of those Curves franchisees and exfranchisees who have shared their experience with this “franchisor of the year” with us who read Franchise Pick and Unhappy Franchisee, Sean Kelly’s websites. Sean Kelly appears to be the only one who doesn’t pull his punches. Perhaps, this is because he isn’t an attorney, and he doesn’t have to compromise with an ugly status quo in which a franchisor like “Curves” is praised as “franchisor of the year.”
While the AAFD may have started off with good intentions, I think you are correct in your assessment that, like Entrepreneur, they are now (at least in part) in the business of selling badges of credibility to franchisors with image problems.
It works: Why should anyone listen to the disgruntled franchisee rabble on FranchisePick.com and UnhappyFranchisee.com when the man who wrote a book on Franchise Fraud named them Franchisor of the Year? They must be practicing Total Quality Franchising, right?
(I think it’s time to take Purvin down off the pedestal, Carol. While his book may have been good, it’s being used to further some questionable companies.)
The AAFD is also giving an award to Don Sniegowski and Janet Sparks for BlueMauMau.org reporting. I assume the AAFD is trying to make nice in order to get favorable treatment on BlueMauMau.org. However, I don’t think Don or Janet are going to fall for that obvious overture… and as long as Richard Solomon is posting on BMM they’re not getting off that easy.
I love giving the AAFD PR advice as much as they love not heeding it. But someone should suggest that Bob talk Howard Heavin into dropping the $10,000 failure fee and stop going after broken franchisees for royalties and advertising fees. Bob should talk Howard into sending someone out to clubs to try to help BEFORE they fail. They could announce this at the upcoming conference and make a big fanfare about the good work the AAFD brought about.
After all, they can’t be getting that much from broke, bankrupt franchisees anyway… and a few kind gestures might play better than an AAFD award.
Curves is being honoured by the AAFD because of: a) the amount of financial support they gave their IndFA, b) the attempt to build a serious collaborative relation through the IndFA, and c) the autonomy given to the IndFa by the franchisor.
Sean;
The system is undergoing contraction, and people who bought high are losing their money.
Curves, in my opinion, like any franchisor should be very worried about maintaining a good resale value in their system.
They have taken the unprecedented step of funding, with big dollars, an IndFA to help keep up the resale values.
I agree that the press release should have stated that. This award is for a specific effort that is franchisee friendly. Fred DeLuca was similarly awarded for his efforts in establishing a viable franchisee coop, and IndFa.
These are not big deals. Cuppy’s on the other hand …
BTW have a new scoop on big Bob Morgan and Ben Doyle …
Michael Webster must mean “first-owners or first-generation franchisees” for the most part when he talks about people who “bought high.”
But, unfortunately this award will be used by Curves to sell to new franchisees, who bear the startup costs, etc.., both here and in the International markets.
Yet, Curves will have no legal obligation to disclose its so-called “contraction” in the FDD in any way that will reveal the unviability for so many of its franchisees who have transferred their units in fire sales or gone bankrupt, etc.
They will be able to sell NEW franchises to innocents and discounted franchise units out the back door on the basis that the AAFD is honoring them as the 2009 Franchisor of the Year!
Pretty disgusting stuff and we see that “churning” is what makes franchising so durable in World economies and that “churning” is supported by the AAFD in support of federal regulatory policy and the income they derive from supporting Franchise Associations whose contracts are accredited by the AAFD, as well.
I can see it now! Some franchise broker or the franchisor himself will wear his US flag pin and his best smile and announce that a franchisor who gets the AAFD award for The Franchisor of the Year can be trusted, and besides you, my man, or my womasn, are eligible for a Veteran’s discount on this franchise because you are a Vet or the family member of a veteran and, as such, you are also eligible for THE PATRIOT EXPRESS LOAN PACKAGE to honor your service.
LET THE BUYER BEWARE OF FRANCHISORS AND THE ASSOCIATIONS WHO HONOR THEM!
Well, I’m just hurt that the AAFD hasn’t given me an award. After all, I have spent a lot more time critiquing the AAFD’s performance than Don Sniegowski. What’s BlueMauMau.org got that that I don’t? It’s that fish, isn’t it?
Well, I’m going to get a cartoon fish and learn some show tunes so I can get honored at the AAFD convention.
If Curves has recognized and is encouraging the Curves Independent Franchisee Association, and if they are getting some real say-so, then Curves should be commended for it. But the AAFD should give them an award for that, specifically, not name them “Franchisor of the Year” when there undoubtedly more exemplary franchisors out there.
Am I correct in assuming this is could be more accurately called the “Franchisor-Who-Is-An-AAFD-Member of the Year Award”?
Michael:
Thanks for the clarification.
Isn’t this yet another case of the AAFD presenting a broad award that implies comprehensive fairness (”Franchisor of the Year”) based on narrow, specific criteria (support for its IndFa and, I assume, the AAFD)?
In the case of Cuppy’s Coffee, the AAFD simply reviewed the Cuppy’s contract, which it accredited, but attached broader praise to the award, issuing statements such as“Cuppy’s Coffee has committed itself to a collaborative franchise culture that adopts high standards of mutual respect between franchisor and franchisees.”
It allowed a simple contract review to be marketed by a fraudulent company as “the highest score ever achieved for fair franchising standards.” No mention of a contract review.
(http://www.bizzia.com/franchisepick/answer-this-franchise-due-diligence-quiz-question-4/)
What are these guys thinking, Michael?
These failing franchisees are closing right and left without even a single support visit to their ailing clubs. They claim they have to pay extra for consulting. The only contact they get from the home office is a collection call for $10K that isn’t in their agreement, and then a demand for royalties and ad fees.
Could any sane (or ethical) person read through these comments, then issue a press release naming the company “Franchisor of the Year”?
http://www.unhappyfranchisee.com/curves-robert-lays-story/